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Updated: 1 day 27 min ago

Regulus Shares Crumble As FDA Halts Testing of Hepatitis C Drug

Mon, 06/27/2016 - 18:45

A new wave of drugs has changed the way hepatitis C is treated. Regulus Therapeutics has not been part of that wave, but the company’s plans to join it took a big hit this afternoon.

La Jolla, CA-based Regulus (NASDAQ: RGLS) said that the FDA has suspended the clinical testing of  its lead drug, RG-101, because of safety problems.

Regulus reported that a second serious case of jaundice, or a yellowing of the skin and eyes, in a Phase 1 study of RG-101. The FDA, as a result, has ordered the suspension—what’s known as a clinical hold. Once it receives a formal letter from the FDA, Regulus says it will work with the agency to have the hold lifted.

Regulus said the hold won’t impact timelines for its three ongoing studies of RG-101, because it has already treated the patients in those trials—two Phase 2 studies and a single Phase 1 study.

Regulus said it would report the trial results at future scientific meetings, but investors don’t seem interested in waiting patiently. Shares plummeted almost 60 percent, to $2.15 apiece, in post-market trading on Monday.

RG-101 is Regulus’s most advanced drug prospect and is critical to its future. The company had $106 million in cash as of the end of March and took out a $30 million loan last week to support clinical development for the drug.

Regulus said the latest case of jaundice was in its Phase 1 study, in which RG-101 was given to patients with failed kidneys. The event was reported in a patient with hepatitis C and kidney failure roughly four months after the patient received a single dose of RG-101.

Regulus was formed in September 2007 as a joint venture between Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) and Carlsbad, CA-based Ionis Pharmaceuticals (NASDAQ: IONS). The company went public in 2012 at $4 per share, but closed as high as $22.08 in November 2014. Shares have been trending downward ever since, and Kleanthis Xanthopoulos, who had been the company’s CEO for seven years, abruptly resigned last June.

The company is developing drugs that block certain microRNAs, small strands of RNA that control networks of genes. It’s an unproven method of drug making, and RG-101 is Regulus’s most advanced bet. It blocks a strand of microRNA called mir122, which is in turn thought to stop the replication of the hepatitis C virus.

Regulus is a late comer to the hepatitis C race, however. FDA-approved pills from Gilead Sciences (NASDAQ: GILD), AbbVie (NYSE: ABBV), and Merck (NYSE: MRK) can wipe out various strains of hepatitis C in a matter of months. Regulus has been trying to show that a single long-lasting microRNA drug can shorten the needed time for a regimen of hepatitis C pills, which if proven, would impact the other major hepatitis C drug makers. In its two Phase 2 trials, for instance, RG-101 is either being administered before other experimental or approved hep C drugs (like Gilead’s sofosbuvir/ledipasvir (Harvoni)). Today’s news won’t help its case, however.

Regulus is hosting a conference call this afternoon to discuss the news.

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Brexit and the impact in the London Startup industry

Mon, 06/27/2016 - 18:05

Editor’s note: Xconomy invited Marcelo Calbucci, a Seattle serial entrepreneur and startup stalwart who just announced plans to move with his family to London, to reflect on the Brexit vote.

No, the skies are not falling. The U.K. vote to exit the European Union has passed, and there is an enormous amount of uncertainty right now to the British people, to the E.U., but also the rest of the world. The next few weeks will be very turbulent with a lot of volatility. I’m an outsider moving to London in the next few weeks, a decision my family and I made months ago. I’ve been following and connecting with investors, entrepreneurs, and super-connectors in London, and for the most part, they are very disappointed and worried about the decision to leave the E.U.

I’m not an economist, a political scientist, or a historian to predict what the future holds for the U.K. and the rest of Europe, but I have a few thoughts on the impact this will have on the startup scene around there.

On my blog post announcing my move to London, I wrote: “[London went] from nowhere four or five years ago to surpassing many US cities and likely to become second only to Silicon Valley in the next five years.”

I take that back.

The glass-half-full people are saying that the critical mass for tech is already in place, and the momentum will only continue. Yes, it will, but it will decelerate. The question is how fast it will decelerate and if it will start moving backward.

Here are the top concerns I have:

1) Talent migration: A competent and ambitious person in the U.S. living in a place that lacks opportunity can just pack their bags and move to San Francisco, New York, or Seattle and be in a place where opportunity abounds. The U.K. had an immense number of E.U. residents migrating there, which included both the ambitious-competent and the unskilled labor. That door is closing. I’m sure they will make it as easy as possible for the tech and entrepreneurial talent to come in (I think), but it won’t be as easy as just packing a bag and moving in.

2) Uncertainty for foreigners: This is not so much a concrete problem as it’s a hypothetical one. If you moved to the U.K. from another E.U. country to give it a shot there, you are probably unsure what the future holds for you. This group of people will be less likely to buy a property, to leave their job to found a startup (in the U.K.), or to make long-term plans until it’s clear what it means for them. Meanwhile, they’ll be “poached” by countries like Germany who’ll promise them a more predictable future.

3) Investors fear: Angel investors and venture capitalists are less susceptible to short economic cycles. However, the public markets do influence the investment decisions of the limited partners who invest in venture funds and VCs themselves, as they weigh whether or not to invest in a given startup. A good (startup) deal is a good deal under most economic circumstances. However, investors might be shy or slow moving, both in the next two to four weeks, and to some extent in the next one to two years until the impact of this outcome is clearer.

4) Trade and Commerce: The U.K. will not do anything stupid like excessive taxation or close its borders, however, there will be new laws, from online privacy to money transfer, from data retention policy to accessibility. As a tech entrepreneur I was already unhappy with some of the burden of doing business in the E.U. (E.U. entrepreneurs could say the same thing about doing business in the U.S.) The compatibility of the laws and regulations isn’t great. With the U.K. leaving we’ll have a “fork,” and this compatibility will get just so slightly worse. The risk here is that it won’t be worth it for a small startup to launch their product in the U.K. until they launch in the U.S., E.U., and China.

5) Openness: No matter how easy and how open the U.K. make its trade, commerce, and immigration policy, it will still be a notch less easy than what it is today. The perception by outsiders is that the U.K. is just building a “wall.” Even that not being true, it will take time for the perception to fade. The long-term result of this perception is still to be seen.

I’m still optimistic about the U.K. tech and startup scene, but not as much as I was before the Brexit vote. I hope lawmakers in the U.K. make progressive choices to avoid an “innovation recession.”

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Biotech Roundup: CRISPR’s 1st Trial, IPO Insiders, Zika & More

Fri, 06/24/2016 - 07:55

It’s a week for the history books. The United Kingdom voted to leave the European Union last night, triggering worldwide financial fears and, perhaps, a breakup of the U.K. itself. Closer to home, Cleveland (pictured) celebrated LeBron James & the Cavaliers’ historic comeback that brought the city its first sports title in over 50 years.

Slightly fewer people paid attention to another historic vote: An NIH panel approved plans for what could be the first-ever human clinical trial of CRISPR-Cas9, the gene editing system that has been taking the scientific world by storm over the past few years. The FDA still has to clear the study, but if it does, it’s sure to become one of the most closely watched scientific events in more than a decade. There’s plenty more news to chew on as well, from the latest developments in the Zika battle to biotech’s sigh of relief when Medicare spending cuts were avoided (for now). Let’s get right to it.

—University of Pennsylvania School of Medicine researchers are planning a cancer trial that could be the first ever to use the gene editing system CRISPR-Cas9 to create a human therapy. The trial plan passed muster with a federal oversight committee earlier this week, but it still must gain FDA approval to begin. The work is being funded by Internet mogul Sean Parker’s new cancer immunotherapy institute, which launched earlier this year with $250 million earmarked for work at Penn and five other medical centers.

—IBM’s Watson Health group said that a commercial product could arrive in 2017 that uses machine learning to digest patient scans, medical records, and other information to help doctors with care decisions.

—Selecta Biosciences (NASDAQ: SELB) of Watertown, MA, became the latest biotech not just to go public this week, but to lean on insiders for help. The company raised $70 million in its IPO, but before the deal current shareholders offered to buy $40 million, or close to 60 percent, of IPO shares. That makes it one of the more extreme recent cases of insider buying in an offering.

—There were two major developments in the fight against Zika virus, which has begun to affect children born in the U.S. First, on Monday, the FDA cleared Plymouth Meeting, PA-based Inovio Pharmaceuticals (NASDAQ: INO) to begin the first clinical trial for an experimental Zika vaccine (check out CNBC’s interview of CEO Joseph Kim for more). Then, in the early hours Thursday, the U.S. House of Representatives passed a $1.1 billion emergency funding bill to fight the virus. The White House had requested $1.9 billion and slammed the House bill, in part because it diverts unspent money that was earmarked for Affordable Care Act administration and the fight against Ebola. Democrats say they will filibuster in the Senate.

—The Associated Press reported that surgeon Paolo Macchiarini faces involuntary manslaughter charges in Sweden related to two patients who died after surgeries he conducted to implant artificial tracheas to replace their damaged windpipes. The work of Macchiarini, who reportedly denied the allegations, led to the formation of Holliston, MA-based Biostage (NASDAQ: BSTG), which was known as Harvard Apparatus Regenerative Technology up until March. Biostage cut ties with the surgeon in 2014.

—Cambridge, MA-based Epizyme (NASDAQ: EPZM) released interim data from the most important trial in its nine-year history, a Phase 2 study of cancer drug tazemetostat. Epizyme has only enrolled a fraction of the patients it aims to, and treated most of them for just a handful of months, so it’s tough to draw any conclusions so far. Epizyme will have more data later this year. Still, shares slumped about 4 percent this week.

—Biotech stocks got a small boost Wednesday when mandatory Medicare spending cuts were avoided, thanks to a slower rise in costs than expected. If cuts had been triggered, the details would have been decided by the Independent Payment Advisory Board, which was put in place by the Affordable Care Act.

—Austin, TX-based Savara Pharmaceuticals bought a Danish drug developer, Serendex Pharmaceuticals, to nab two inhaled experimental therapies. Savara now aims to pull together a funding round to support a future IPO, David Holley reports.

—Funding news: Annexon Biosciences of South San Francisco, CA, raised a $44 million Series B round led by New Enterprise Associates to move its neurodegeneration treatments toward clinical trials…Basel and Cambridge-based CRISPR Therapeutics added $38 million to its previously announced Series B round, bringing the total financing to about $140 million. CRISPR added several new investors in the round, such as Wellington Management, New Leaf Venture Partners, and Franklin Templeton Investments…Boston-based Paratek Pharmaceuticals (NASDAQ: PRTK) raised $55 million in a stock offering after a successful Phase 3 trial last week…Cambridge-based IFM Therapeutics raised $27 million from Atlas Venture, Novartis, and Abingworth. The company is led by Gary Glick, the former founder of Lycera, which inked an option-to-buy deal with Celgene last year.

—EndoCyte (NASDAQ: ECYT) of West Lafayette, IN, is saying goodbye to founder and CEO Ron Ellis. Ellis stepped down suddenly this week and will take home nearly $1 million in severance. Chief operating officer Mike Sherman was named his successor.

Stat profiled Rachel Haurwitz, the CEO of Berkeley, CA-based Caribou Biosciences, which was co-founded by CRISPR-Cas9 pioneer Jennifer Doudna.

—The 2016 Blavatnik Awards for Young Scientists went to Harvard University astronomer David Charbonneau, Scripps Research Institute chemistry professor Phil Baran, and Michael Rape of the University of California, Berkeley, for his research on a process called ubiquitylation that marks unwanted proteins for destruction within a cell. Rape is a co-founder of San Francisco biotech Nurix. Each award winner gets a $250,000 cash prize.

—Cambridge-based Eleven Biotherapeutics (NASDAQ: EBIO) will ax 14 employees, or 70 percent of its existing workforce, to save cash as it continues to evaluate its next steps. Eleven, whose eye drug failed two Phase 3 trials last year, recently sold off one of only two remaining drug candidates in its pipeline.

—Celgene (NASDAQ: CELG) paid a total of $50 million to form a 10-year research consortium with the University of Pennsylvania, Columbia University Medical Center, Johns Hopkins University, and the Icahn School of Medicine at Mount Sinai. The institutions will work on cancer drugs, and Celgene will get an option to license them.

—Warsaw, IN-based OrthoPediatrics filed for an IPO to help support sales expansion and new product development. The company sells orthopedic devices used in surgeries on children.

Photo of the Cleveland Cavaliers’ victory parade courtesy of FirstEnergy via Creative Commons.

Alex Lash contributed to this report

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Google Fiber Buys Webpass in Wireless Internet Land Grab

Thu, 06/23/2016 - 17:13

Google Fiber plans to acquire Webpass in a deal that trims the ranks of independent Internet service providers—an industry already maligned for its lack of competition—but ultimately could boost consumer access to high-speed Internet.

San Francisco-based Webpass has spent the past 13 years working to bring ultra-fast wireless Internet access to homes (primarily large apartment complexes) and businesses around the country. Without the aid of venture capital, the small upstart says, it has grown to “tens of thousands” of customers in five metro areas: the Bay Area, Boston, Chicago, Miami, and San Diego.

But getting to this point has been a painstaking slog filled with logistical and political challenges. Xconomy has chronicled Webpass’s path, which has involved methodically building out its technological infrastructure city by city; negotiating with property owners and managers to install its equipment; navigating long-standing regulations that Webpass founder and president Charles Barr has argued favor entrenched cable and phone giants; and fighting to wrestle customers away from those big Internet service providers.

Six-year-old Google Fiber has had its own set of challenges. Fiber networks are expensive to build. And as Barr himself pointed out in an Xconomy op-ed in April, Google Fiber has rolled out its service slowly to a relatively small geographic footprint, despite the vast resources of its parent company.

Now, Webpass will tap into those deep pockets. “By joining forces, we can accelerate the deployment of super fast Internet connections for customers across the U.S.,” Barr wrote in a blog post announcing the tie-up. “Google Fiber’s resources will enable Webpass to grow faster and reach many more customers than we could as a standalone company.”

The terms of the deal, which Barr wrote is expected to close this summer, weren’t disclosed. Barr didn’t respond to an Xconomy e-mail message seeking more details.

The acquisition will instantly expand the footprint of Google Fiber, which is currently available in Atlanta, Austin, TX, Kansas City, Nashville, and Provo, UT, with another 18 locations either in the works or being considered. Google Fiber established most, but not all, of those operations itself—it entered Provo by acquiring fiber optic network provider iProvo in 2013, Wired reported.

The Webpass deal also helps Google Fiber diversify the methods it uses to deliver Internet signal to customers. Google Fiber primarily enables access by laying fiber optic cables that run into houses and other buildings. Webpass, meanwhile, uses a network of antennas installed on buildings and microwave towers to beam Internet signal via radio frequency technology that employs point-to-point, line-of-sight communication. Google Fiber began testing its own wireless Internet technology in Kansas City earlier this year, Recode reported.

Webpass will also bolster Google Fiber’s efforts to serve more businesses and consumers living in apartment buildings, Recode pointed out.

Meanwhile, other wireless Internet service companies include NetBlazr, Ethoplex, and Starry, a young startup led by the founder of controversial (and now defunct) streaming video service Aereo.

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San Diego Sees Strong Cybersecurity Growth As Firms Seek Talent

Thu, 06/23/2016 - 14:32

San Diego’s cybersecurity workforce has grown by nearly 15 percent over the past two years, according to a study released today by the Cyber Center of Excellence, a nonprofit industry group created to boost cybersecurity jobs and technologies in the region.

The center commissioned the report to help quantify the economic impact of the cybersecurity industry in San Diego, and to assess how employers view their prospects for growth and needs for future hiring. The center also asked the San Diego Regional Economic Development Corp. (EDC), which conducted the study, to analyze how cybersecurity has changed since 2014, when the first cybersecurity industry analysis led to the creation of the Cyber Center of Excellence.

According to the new report, San Diego now has more than 104 private cybersecurity firms that employ 4,230 people in the region, according to the analysis. That was up 19 percent from the 2014 study, which had 102 cybersecurity firms with 3,550 workers.

“Firms are still pretty dependent on government contracts for their business,” but the industry has moved over the past two years to more private sector customers, said Michael Combs, a CBRE research manager in San Diego and chief author of the study. Combs worked previously at the EDC and helped prepare the 2014 report.

Of the companies surveyed, 43 percent said they have a national customer base, and 37 percent have an international base. The customer base also has been evolving, with a bigger mix of government and commercial customers. For example, Combs said:

—About one-third of the companies surveyed in 2014 said the government was their primary customer. Only about 13 percent describe the government as their primary customer today.

—In 2014, 27 percent of the companies reported a mix of government and private customers. Today, 40 percent said they have a mix of government and private customers.

—The percentage of companies that focus exclusively on commercial markets also has increased, from 40 percent in 2014 to 47 percent today.

Many of the government contracts for cybersecurity are awarded by the Navy’s San Diego-based Space and Naval Warfare Systems Command (SPAWAR). The military procurement command is responsible for developing and maintaining the fleet’s global communications and IT capabilities. SPAWAR alone employs an additional 3,390 locals in cybersecurity, according to the study. That represents a 9.5 percent increase from the 3,095 workers counted in 2014.

Altogether, there are 7,620 military and private sector cybersecurity jobs in San Diego, a 14.7 percent increase from the 6,640 jobs counted in 2014.

The report describes SPAWAR as “the single most valuable resource to San Diego’s cyber ecosystem.” But as the region’s single biggest employer of cybersecurity experts, SPAWAR has challenges in terms of attracting qualified employees and in training local students through internships. “One issue area for SPAWAR is the regulatory structure that governs how they can recruit and retain talent,” the report says. “The sensitive nature of their work creates limitations on who and how they might be able to recruit from universities.”

Recruiting qualified professionals is a problem, but the report notes it is not unique to SanDiego, saying, “An analysis by the Peninsula Press and Burning Glass found that more than 209,000 cybersecurity jobs in the U.S. were unfilled as of March 2015.”

Using impact modeling software (Implan), the study found that the economic impact of San Diego’s cybersecurity cluster amounts to about $1.9 billion in direct and indirect impact on the local economy, as well as some “induced effects” such as increased wages. That’s about 26 percent more than the overall economic impact of $1.5 billion in 2014.

The growth seen over the past two years is not expected to continue at the same pace, Combs said. “We’re seeing continuing challenges in finding talent,” he said. “Eighty percent of the firms said they had some or great difficulty in finding talented employees.”

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The Evolution of the App Stores

Thu, 06/23/2016 - 07:20

In many ways, Apple and Google are following similar paths. At their annual developer conferences, Google I/O, held last month, and Apple’s WWDC, last week they both announced updates to their development platforms. Google is making major improvements to Android Studio, while Apple is continuing to invest in Swift and announced Playgrounds, an exciting new way to learn how to program in Swift. There were also areas in which the focus of the two conferences diverged. Apple announced more progress on their privacy initiatives, while Google remained highly product-focused, announcing numerous apps, new pieces of hardware, and more development tools for VR.

Team Apptentive attended both companies’ conferences in San Francisco, and we caught a glimpse into how the two platforms are evolving, and what it means for developers and consumers alike. Here are three of the most important takeaways:

1. Customer experience is a high priority for both companies.

As customer feedback becomes critical to creating a better experience, Google announced several components of the Play Store that will support companies in their quest to understand consumers. Two customer-focused announcements stood out: the reviews API and the customer case studies. The reviews API enables developers to respond to customer comments in Google Play, a huge advantage for companies that understand apps are now an extension of their brands. In announcing the reviews API, Google presented customer case studies of numerous publishers who shared a lot of evidence that talking to their customers has significantly improved their app ratings, customer satisfaction, and retention. The theme: building customer relationships creates a more enjoyable user experience and it leads to better monetization over time.

Consumers are using more apps than ever, creating an opportunity to increase monetization and user experience at the same time. Apple’s creation of single sign-on should allow for a smoother in-app experience in third-party apps. It’s proven that consumers spend more money when the barriers to entry are lowered, and the ability to sign in to media apps with ease will certainly increase the amount of content they consume, while also increasing the variety of the media sources. Today’s “cord-cutter” consumer experience is marred by a variety of frictions introduced in the login process; removing that will likely accelerate the movement to online viewing sources. While this might give some of the media companies concern, we see that today’s situation is similar to the state of online music in the early 2000s: There is so much friction in the process that consumers are more likely to seek out illegal content sources.

2. Success of the app stores starts with developers.

Both Google and Apple announced continued investment in their app stores, specifically around developer support. Google’s strategy seems straightforward: The more support they can provide to Android developers, the easier it will be to develop for Android. That will drive more apps, which will ultimately drive more consumers to Android. Competing with Apple in this area has been challenging for Google.

Apple’s service revenue is growing, and they’re making investments to compete more directly in producing original content (against the likes of Netflix, Amazon, etc.). Apple holds the throne in app store monetization, and until Google is able to catch up, iOS will likely remain the first choice for developers. Google’s aggressive move to release the Firebase mobile and web back-end infrastructure suite, largely free, to developers on both iOS and Android indicates their viewpoint on how to make developers most successful: through more tools and platform support.

Apple is taking a different approach to developer support, announcing Swift Playgrounds for iPads. Aimed at kids, Swift Playgrounds teaches people of all ages to code using Apple’s new language. This tool should help Apple court the next generation of developers, while ensuring that today’s developers are able to bet confidently on the Swift language. In addition, Apple’s new subscription model incentivizes app developers to create strong customer relationships and emphasize loyalty in their business models. The revenue sharing model remains at a 70/30 split for the first year, but now developers who have subscribers for over a year will see their share rise to 85 percent. This initiative should push developers to be more thoughtful about their customer experience. Both consumers and app developers will reap the benefits of the new subscription model.

3. Apple continues to highlight leadership in privacy.

Considering Apple has been outspoken about their stance on privacy, it’s unsurprising that Apple announced differential privacy—a system in iOS 10 that will mask data to prevent the compromise of individual identities while still providing companies with accurate data about their customers. Last year, Tim Cook publicly criticized Facebook and Google for their privacy policies, and Apple took on the DoJ early this year after the FBI ordered the company to create a backdoor to unlock a suspected terrorist’s iPhone. In a world where data and privacy are equally important to consumers and businesses, their existence should not be mutually exclusive. Differential privacy works to ensure this remains the reality.

Google, on the other hand, didn’t announce any privacy initiatives at I/O, focusing largely on product developments and the massive powers of its artificial intelligence and machine learning research.

What’s interesting about this differing perspective on how to provide value to consumers is that Apple clearly has to work on more personalization capabilities in order to satisfy today’s consumer. From contextual messaging to the ability to use Siri to order a Lyft, Apple showed off a lot of features that appear to be similar to capabilities available on Android. With their strict stances on privacy and their gradual opening of the platform to developers, Apple is having to walk a thin line, and its balancing act is fun to watch.

Finally, one thing that was obvious from both conferences was that each company thinks first and foremost about mobile. At I/O and WWDC, the primary narrative was about the mobile consumer (i.e. look at how many searches they’re conducting), the importance of tracing the consumer journey (only possible when connected to a mobile device), and the global opportunity in front of us (because almost every human being will own a mobile device).

We live in a mobile world and the world’s largest operating system providers are working hard to maintain their positions and enhance them.

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IBM Watson Health Launches Imaging Effort for Cancer, Other Diseases

Wed, 06/22/2016 - 14:00

So far, the story of IBM Watson Health has been mostly about growth and potential. Today, it’s more about action.

The healthcare computing giant, now headquartered in Cambridge, MA, is unveiling a collaborative effort in medical imaging that includes partnerships with health systems, radiology providers, tech companies, and academic medical centers.

Watson Health is pushing the idea of “cognitive imaging”—using computers to understand and draw clinical insights from images and other medical data—to try to help doctors provide better care at lower cost than the status quo. Think computer vision and data-analysis techniques applied to radiology scans and patient records to improve detection of diseases.

If that all sounds optimistic, well, of course it is. So is the scope of the new IBM collaboration, which spans cancer (breast, lung, and others), eye health, diabetes, brain disease, and cardiovascular disease. Watson Health is teaming up with 16 partners, which include imaging and diagnostics company Hologic; Sentara Healthcare; Sheridan Healthcare; UC San Diego Health; University of Miami Health System; and Merge Healthcare, which was acquired by IBM last year and is now part of Watson Health.

“What we really want to do is augment what physicians can do, how they can look at copious quantities of information that are relevant to a patient,” says Anne LeGrand, vice president of imaging at Watson Health, in an interview. “Watson will learn from that, and be a better partner to physicians.”

LeGrand (pictured) is leading the collaborative effort. She’s based in the Seattle area and joined Watson Health in April after a nearly 30-year career at companies such as Philips and GE Healthcare. She knows imaging, but she also knows how it connects to business and people. “You always have to have the patient at the core of what you do,” she says. “Personally, it’s why I come to work, and why I love this space.”

Watson’s imaging initiative is hard to quantify in terms of dollars and people—but it’s big. Watson Health has 5,000-plus staff, and together with its partners, it’s safe to say many thousands of people are involved. “When you look and say we just spent $4 billion in just under 12 months—IBM’s definitely spending,” LeGrand says. She’s referring to how much Watson Health has spent on growth, including acquisitions like Merge and Truven Health Analytics.

The first commercial product to come out of the effort is likely to hit in 2017. It will be a “summary platform” for electronic medical records, LeGrand says, “to aid physicians and augment intelligence… in understanding clinically relevant information.” That means doctors should be able to use Watson to read and digest health records, lab results, radiology reports, and relevant medical literature. The challenge lies in presenting the insights in a way that helps doctors with their diagnoses and treatment plans, without adding to their workload. (No word yet on any financial terms for IBM’s partners in developing the product; LeGrand will say more about the effort at today’s Influx conference in Boston.)

LeGrand calls the approach “augmented intelligence,” as opposed to artificial intelligence. “This is not taking the place of physicians,” she says. Rather, it’s “anything we can do to make them more effective, efficient, and well informed so there’s things they don’t have to think about, and they’re well prepared.”

Down the road, LeGrand sees potential uses for Watson Health outside of clinics, perhaps in wearable devices, preventive care in the home, and connections to other parts of the healthcare ecosystem. In particular, she says, Watson’s machine-learning approach—using data from the imaging collaborations, among others—could help it become a “predictive” tool that can make recommendations based on things like patient demographics, geographies, and family histories.

LeGrand is also prescient enough to predict that her “30 years in imaging and informatics will be worth three years” of machine-augmented learning. Which is all to say that Watson Health may uncover new paths that none of us can yet imagine.

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Radicle Accelerator Fund Launches to Nurture AgTech Innovation

Wed, 06/22/2016 - 08:30

Radicle, a new accelerator fund focused on agricultural ventures, is launching today with plans to seed and nurture the next generation of agtech companies addressing global farming problems.

The new accelerator will have locations in multiple states and around the world. Radicle, which takes its name from the botany term for the part of a plant embryo that develops into the primary root, was founded by a mix of agricultural investment and industry heavyweights. Agtech investment firm Finistere Ventures; private equity firm Cloud Break Advisors; and Israeli venture capital firm OurCrowd contributed to the new accelerator. From industry, Bayer (ETR: BAYN) and DuPont Pioneer are throwing in their support. Radicle representatives plan to discuss their plans for the accelerator during AgTech Week 2016, an ag investment conference being held in San Francisco this week.

Radicle says it will focus on challenges to farmer productivity, sustainability, and quality in food and agriculture. The areas where the accelerator is scoping for promising technology include genomics, seeds, biological products that can be used for crop protection, and big data analytics with applications in precision agriculture.

The new accelerator says it already has partnerships with institutions in Australia, Canada, and Israel. Before making an investment, Radicle says it screens technologies and can quickly vet and validate technologies through its farm connections.

So far, Radicle has closed on $6 million in funding, and the accelerator expects its pot will reach up to $15 million. Arama Kukutai, partner at Finistere Ventures, said in a statement that seed investment and support through Radicle will help prepare companies for a Series A round of financing faster and with less capital. “We expect a deeper and better prepared pipeline of new agtech companies to emerge,” he said.

The Radicle launch is just the latest in a string of efforts across the country that aim to bring financing and support to early-stage companies developing technologies for the agriculture and food industries. In Michigan, the Great Lakes Ag Technology Business Incubator is helping farmers turn their ag ideas into businesses. Earlier this year, Finistere teamed up with Kinston, NC-based International Farming Corporation to form Willow Hill Ventures, a fund intended to fill the Series B financing gap facing many agtech startups while also providing those startups with access to farm land for testing new technologies. And earlier this week, Kellogg Company (NYSE: K) launched 1894 Capital, a venture capital fund that will invest in startups working in areas such as foods, ingredients, and packaging.

But Radicle’s plans more closely resemble the Research Triangle Park-based AgTech Accelerator, which shares an industry partner in Bayer. Last month, AgTech Accelerator unveiled $11.5 million in funding along with plans to scout out promising technologies at partner universities across the country and build a business around them. Those technologies could become independent companies or they could find a place with Bayer or Syngenta (NYSE: SYT), the North Carolina accelerator’s other industry partner.

Radicle’s physical presence includes sites in San Diego; Palo Alto, CA; Research Triangle Park; parts of the Midwest; and Israel. But the accelerator isn’t limited to those sites and it says it will offer agtech startups connections to universities such as Texas A&M, the University of California, the University of Wisconsin-Madison, and the University of Queensland in Australia.

Radicle will also link companies to research institutions including Advanced Research Projects Agency – Energy, the Australian Centre for Plant Functional Genomics, and the Donald Danforth Plant Science Center. Besides investment, companies accepted into the accelerator will receive advice, mentoring, and industry connections. Companies that graduate from Radicle will be eligible for follow-on financing from the backers of the accelerator.

Photo courtesy of Flickr user Heather Smithers under a Creative Commons license.

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EY Names 6 Startup Leaders as San Diego Entrepreneurs of the Year

Wed, 06/22/2016 - 02:46

Six San Diego business risk-takers have been inducted into the pantheon of EY Entrepreneurs of the Year, joining over 10,000 people around the world who have been honored over the last 30 years by the multinational professional services firm.

An independent panel of judges selected the six winners at a Monday evening gala attended by over 500 people at the Fairmont Grand Del Mar Resort Hotel, about 20 miles north of downtown San Diego. The winners were selected from a field of 17 finalists who represented 15 local companies that collectively employ over 2,700 people and have combined revenue of more than $1 billion.

The EY Entrepreneur of the Year awards program now recognizes entrepreneurs in over 145 cities in 60 countries who “demonstrate excellence and extraordinary success in such areas as innovation, financial performance, and personal commitment to their businesses and communities.” Award winners from San Diego and other regions are now eligible for consideration for the national Entrepreneur Of The Year 2016 program.

The overall Entrepreneur Of The Year award winner will be announced on November 19 at EY’s national awards gala in Palm Springs, CA.

The winners are:

Life Sciences: BioLegend CEO Gene Lay

San Diego-based BioLegend develops and manufactures reagents for biomedical research in immunology, neuroscience, cancer, stem cells, and cell biology.

Financial Services: Renovate America co-founders JP McNeill and Nick Fergis

San Diego’s Renovate America specializes in software and financing for residential PACE (property assessed clean energy) programs that improve residential energy and water efficiency. The company has provided about $1.4 billion worth of funding for home improvements through its HERO program.

Tech Services: GreatCall CEO David Inns

San Diego-based GreatCall is a mobile virtual network operator targeting the 65+ market with mobile phones, health apps, medical alert devices, and other technology for active and independent living.

Consumer Products: Fashionphile President Ben Hemminger

Carlsbad, CA-based Fashionphile is an online shopping site for buying and selling luxury handbags and accessories that authenticates and certifies every item sold. Fashionphile says it has enabled thousands to “reclaim designer bags and accessories at exceptional value.”

Real Estate and Renewable Energy: Westcore Properties President and CEO Donald Ankeny

Westcore is a commercial real estate firm managing over 20 million square feet of office space valued at more than $1.5 billion.

EY San Diego Entrepreneurs of the Year (from left to right) Renovate America co-founders JP McNeill and Nick Fergis; GreatCall CEO David Inns; Westcore Properties CEO Donald Ankeny; BioLegend CEO Gene Lay; and Fashionphile President Ben Hemminger.

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Biotech Roundup: Kadmon Debt, Hemo Data, Loose Lips & More

Fri, 06/17/2016 - 07:30

Familiar biotech names—not necessarily familiar for the right reasons—made news this week in biotech. Data from a hematology conference stoked dreams of approval, though still on a far horizon, for a couple drug makers. Long anticipated, Walgreens officially cut ties with Theranos, and the FDA both gave and denied approvals. You think a Game 7 in the NBA Finals is going to be epic? Wait ’til you check out our weekly biotech roundup.

—Kadmon Holdings, the New York biotech formed by former ImClone Systems CEO Sam Waksal, finally unveiled IPO plans after hinting at an offering for more than a year. The filing held some surprises, however, as Xconomy reported: plans to convert about $200 million in debt—a massive amount for a privately held biotech—into shares at the IPO, with some of those shares holding special privileges for their owners. Waksal is also getting up to $25 million in severance. Convicted in 2003 of several felony charges related to insider trading, he is barred from serving as an officer or director of a public company.

— Cambridge, MA-based Agios Pharmaceuticals (NASDAQ: AGIO) presented early data from two drugs, AG-348 and AG-519, for a rare inherited form of anemia. Safety concerns regarding AG-519 spooked investors, however, sending shares down more than 20 percent. The stock didn’t recover much after Agios provided cautiously promising patient data on AG-348 at the European Hematology Association’s annual meeting in Copenhagen.

—More updates from the hematology meeting: Philadelphia-based Spark Therapeutics (NASDAQ: ONCE) and Dutch firm UniQure (NASDAQ: QURE) both updated their hemophilia B gene therapy programs. Despite technical differences and the early nature of the data that made comparison difficult, Wall Street declared Spark this week’s winner. UniQure’s shares fell more than 16 percent.

—Two Bay Area firms said in Copenhagen they hope to ride interim data into pivotal trials later this year. Global Blood Therapeutics (NASDAQ: GBT) of South San Francisco, CA, updated its ongoing Phase 1/2 trial for GBT-440, a sickle cell disease treatment. And True North Therapeutics (NASDAQ: GBT), also of South San Francisco, unveiled interim Phase 1b data from five patients with cold agglutinin disease, in which a person’s immune system attacks his or her own red blood cells. There are about 5,000 CAD patients in the U.S.

—It wasn’t quite a jump-the-shark moment, but FDA’s top cancer drug regulator splashed a little cold water on cancer immunotherapy in a Reuters story this week, wondering to a reporter if drug companies should focus on new ideas instead of drugs that aim for targets others have already hit.

—All the while, Merck (NYSE: MRK) disclosed pembrolizumab (Keytruda) bested chemotherapy in a Phase 3 trial of previously untreated patients with non-small cell lung cancer; the study was stopped early because of the positive results. Pembrolizumab and nivolumab (Opdivo, from Bristol-Myers Squibb) are approved for lung cancer patients who have failed chemo, but both could become the standard of care for newly diagnosed patients, too. Bristol-Myers (NYSE: BMY) will have data from a similar trial of nivolumab later this year.

—News for a group of slumping East Coast biotechs: Christoph Westphal and former Genzyme CEO Henri Termeer both stepped down from the board of Cambridge-based Verastem (NASDAQ: VSTM), whose shares are worth just over $1.30 apiece… Aegerion Pharmaceuticals (NASDAQ: AEGR) will merge with QLT (NASDAQ: QLT) of Vancouver and change its name to Novelion Therapeutics… Eleven Biotherapeutics (NASDAQ: EBIO) sold the rights to eye drug prospect EBI-031 to Roche as it continues to evaluate strategic alternatives… And Infinity Pharmaceuticals (NASDAQ: INFI) and Chiasma (NASDAQ: CHMA) are both cutting large portions of their workforce after setbacks. Shares of Infinity, in particular, were hammered, falling more than 60 percent.

—Shares of Boston-based Paratek Pharmaceuticals (NASDAQ: PRTK), meanwhile, surged more than 20 percent after its antibiotic, omadacycline, succeeded in the first of two Phase 3 trials.

—The FDA approved a cholera vaccine, Vaxchora, giving Redwood City, CA-based PaxVax its second commercial product. The agency was less generous to Coralville, IA-based KemPharm (NASDAQ: KPHM), rejecting the firm’s abuse-deterrent pain killer even though opioid abuse is top of mind in the U.S. right now. The rejection came a month after a panel of FDA advisors recommended the drug, but then voted to remove the abuse-deterrent label—a case of damning with faint praise, as investors realized last month.

—From the “loose lips” department… Significant data from the Novo Nordisk diabetes drug liraglutide (Victoza) presented at a medical conference leaked on Twitter an hour before it was due for release… And Madison, WI-based Exact Sciences (NASDAQ: EXAS) got a boost when the U.S. Preventative Services Task Force changed its classification of colorectal cancer screening methods, which has implications for Exact’s diagnostic, Cologuard. An early leak appears responsible for a 33 percent spike in Exact shares the day before the news broke.

—Funding rounds: Cambridge-based Mersana Therapeutics closed a $33 million Series C round with the aim of testing its first drug, an antibody-drug conjugate for breast cancer called XMT-1522… Rockefeller University spinout Rgenix’s $33 million financing was the second largest for a privately held Manhattan biotech this year. It’ll begin clinical trials for its lead drug, a cancer immunotherapy agent, in the second half of 2016… Blade Therapeutics of South San Francisco raised $45 million to push its preclinical work on drugs to treat fibrotic disease… Former Dendreon CEO Mitch Gold’s new company, Alpine Immune Sciences, pulled in $48 million from OrbiMed Advisors, Frazier Healthcare Partners, and Gold’s own fund, Alpine BioVentures.

—Ben Fidler contributed to this report

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“Stay Lean as Long as You Can,” and Other VC Wisdom from Mark Suster

Thu, 06/16/2016 - 11:41

What does it take to build a startup in today’s market?

Put a half-dozen entry-level tech entrepreneurs together anywhere outside of the Bay Area, and it won’t take long before they start listing the local market deficiencies. In San Diego, the complaints often focus on the relative scarcity of venture capital and hometown VC firms.

So when the San Diego Venture Group recruited Mark Suster of Los Angeles-based Upfront Ventures to give the keynote talk Tuesday night for Startup Week San Diego, more than 800 people filled a downtown auditorium. Aside from benefitting from the notable sale of Upfront portfolio companies Burstly, Gravity, Maker Studios, and Health Data Insights, and the IPOs of Ulta Beauty (NASDAQ: ULTA), TrueCar (NASDAQ:TRUE]]), and Envestnet (NYSE: ENV), Suster is a two-time entrepreneur, Techstars mentor, and prominent blogger on the VC business from both sides of the table.

To Suster, founding a tech startup is a lot like mounting an expedition. Many entrepreneurs and investors are focused on the peak when they should focus instead on their base camp, and bringing together the resources they’ll need to scale their business.

And that’s not just a play on words.

The most important takeaway of the evening, Suster said, is that it’s only by using the Internet to dramatically increase their market reach and size (getting to scale) that Web startups can significantly cut the price of the goods or services they provide. It is the key advantage that enables startups to overcome incumbent companies, Suster said.

Startup Week San Diego Crowd at Mark Suster Talk

But too many Web entrepreneurs squander that advantage by jumping into the same market as other Web startups, and offering similar goods and services. To Suster, tech entrepreneurs should  think about starting companies that solve harder problems in … Next Page »

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Balancing Risks and Opportunities: The Board’s Perspective

Wed, 06/15/2016 - 10:06

People start a business for many reasons. Some do it out of sheer passion, while others do it to create wealth and economic growth. Yet, underlying it all is a willingness to take risks. Entrepreneurs and established companies make risky decisions every day in the hope that those risks will translate into better opportunities, better performance, and greater profitability. However, as we all know, too much or too little risk can be a bad thing. So, how do you find the middle ground? How do you effectively balance risks and rewards for optimal success? In this regard, I believe a lot of great advice can come from your board of directors.

Many startups choose not to establish a board of directors until a few years down the line. However, I’ve found that the startups that grow the fastest are often those that built a good board of directors as soon as they started their business. Having a board helps you keep your eye consistently on the strategic aspects of your business which, in turn, helps you attract investors and customers. What’s more, a board, being responsible for corporate governance, plays a major role in ensuring that your risk management program is as robust as it needs to be.

A few weeks ago, I had the pleasure of joining a boardroom panel discussion at the MetricStream GRC Summit 2016 in Washington, DC, on the subject of “Leading with Governance, Risk, and Compliance.” With me on the panel were eminent business and government leaders, and board directors: Kenneth Bacon, Co-Founder and Managing Partner, RailField Partners, Board Director at Comcast; Rodney Slater, Partner, Squire Patton Boggs, Former United States Secretary of Transportation, Board Director at Verizon Communications; and Candace Duncan, Former Managing Partner at KPMG, Board Director at Discover Financial Services, FTD Companies, and Teleflex.

The panel, which was moderated by Bill Coffin, Editor in Chief of Compliance Week, shed some light on what companies – both large and small – should be doing to effectively balance risks and opportunities. Here are some insights and key takeaways from the discussion:

The Top Risks Keeping Boards Up at Night

While companies are getting better at managing operational risks, the primary concern for many boards is controlling external risks – whether they be geopolitical uncertainties, changes in buyer behavior, financial volatility, regulatory changes, or cybersecurity risks.

Kenneth Bacon added, “An opportunity that presents a lot of risks is what I call the democratization of technology. There was a time when all the data in a company was centralized and controlled by a few people, and the velocity of information was relatively slow. So it was easy to control things.”

Today, however, the situation is different. Now, many more employees have access to confidential information about the business. “What’s to stop them from leaving their iPad on the plane or talking about things with their neighbor?” asks Bacon. Something as simple as an open calendar can be manipulated for information if it falls into the wrong hands.

“So on one hand, you have this need to be faster and spread out technology, but the more you do it, the harder it is to control the risks associated with all that information floating around the company,” he remarked.

These risks become increasingly challenging to manage as the company grows. However, even in a small startup, there are many risks that matter – such as hiring the wrong leaders, not getting sufficient investor support, or lacking a competitive advantage. Then there are product risks (can we translate our vision into a successful product?), market risks (do we have customers who are willing to buy our product?), and cash risks (can we generate enough money to self-sustain the business?).

Mitigating Risks and Seizing Opportunities

Given the range of risks that affect both large and small companies, here are four best practices to effectively balance downside risks with the upside risks, from the board’s perspective:

1. Give Risk and Compliance Professionals a Seat at the Table

Unlike traditional risk and compliance management – which was largely a retrospective look at the risk incidents that occurred – today, boards and C-suite executives want to spend more time looking ahead at what risks could occur; what can be done to keep them in check, or more importantly, what can be done to transform them into opportunities.

The best people to answer these questions are risk and compliance executives, which is why it is so imperative that they be included in board discussions. Noted Candace Duncan, “Compared to ten years ago, there’s now a seat at the table for the risk and compliance individual. That individual is there to not only help protect and prevent, but also encourage the strategy.”

2. Ensure that Risk Information is Communicated to the Board in a Simple Manner

Once risk professionals have a seat at the table, the onus is on them to report risk data to the board as effectively as possible. Remarked Duncan, “It can be very difficult boiling down what you and your team have spent thousands of hours on, into a 15 minute presentation. But keep it simple. Make sure that what you’re presenting is efficient and effective for that board member…What do you want us to learn from this information and how do you best share it? It isn’t easy to do, but putting effort and energy into that can be very helpful.”

It’s also important to set a context for the issues that are reported. Are they big or small? Which part of the business do they affect? What will be done about them? The truth is that board members may not be aware of the ins and outs of risks. They need clear, comprehensive information to make decisions.

3. Pay Attention to How Other Companies Tackle Risk

Sometimes, the best way to decide whether or not to take a risk is to look at how other companies are doing it. Bacon observed, “One thing that companies often neglect is the competitive element. If there’s a risk, and you’re pointing it out to me, I want to know what my competitors are doing. Are they taking the risk or mitigating it? If you tell me not to take this risk, but my competitors are taking it, I need to know that… Risk doesn’t exist in a vacuum. Sometimes, it’s relative.”

Bill Coffin reminded us that the biggest risk can be not taking a risk at all. And that information also needs to be communicated to the board, so that they can make choose how to take risk intelligently, and manage it well.

4. Implement an Effective Risk Management Framework

Incidents like the Panama Papers leak and even the upcoming presidential elections are poised to trigger significant regulatory changes that may bring some serious risk and compliance challenges. So, it’s important for boards and the C-suite to get back to the basics and make sure that they have the right risk management framework in place. Scenario planning also helps you prepare to respond effectively to a potential risk.

“I would add that one thing to do is to get the issue of risk and risk mitigation on the strategy agenda,” said Rodney Slater. “Generally, a strategy session stretches across 2-3 days, and gives you the time to sit, digest, contemplate, and respond to risk data. That’s better than a board meeting where you’ve got a number of things to get through.”

In an increasingly volatile and regulated business landscape, the board of directors is no longer just an oversight function, but an active participant in building a risk-intelligent organization. However, risk management is ultimately a concerted effort. Therefore, risk and compliance professionals must engage in board discussions, communicate risk intelligence effectively to support decision-making, learn from how other companies manage risks, and ensure that robust processes and controls are in place to balance risks and opportunities.

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Xconomy Guide to Best Sessions at Startup Week San Diego

Fri, 06/10/2016 - 11:36

Startup Week San Diego, like a lot of other places that host similar events, has been billed as a weeklong celebration of entrepreneurship.

Seattle’s UP Global, now part of Techstars, oversees the operation of Startup Week and other programs for tech entrepreneurs across the U.S. and abroad. But while Startup Week San Diego has always collaborated with UP Global, San Diego entrepreneur and Startup Week organizer Austin Neudecker said, “We’ve always been an independent entity.”

Startup Week San Diego is intended to showcase local startups that are focused on innovation in such areas as Software as a Service (SaaS), consumer Internet, mobile technology, hardware, and defense technology.

“The vision I’ve always had for Startup Week San Diego is to be the voice of the entrepreneur, and to be building the community and identity to be able to get the resources and help they need to build companies faster,” Neudecker said.

In the four years since he organized San Diego’s first Startup Week, Neudecker said the tech summit has grown from 10 events that drew about 300 people to this year’s spectacle, which features 143 events and is expected to attract between 2,000 and 3,000 attendees.

This year’s Startup Week also has added five new tracks intended to highlight San Diego’s strengths as a startup ecosystem. The new tracks are: biotech (BioSD); craft beer (BrewSD); cybersecurity and defense (SecureSD); graphic design (DesignSD); and San Diego’s crossborder synergies with Tijuana (CrossSD).

The business sessions and workshops begin Monday at 8:15 am, but the opening day celebration won’t begin until later—at 6 pm, to be precise—with the kickoff launch party on the Broadway Pier. The event will feature live music, networking, food, and drinks.

Tickets for this year’s entrepreneurial showfest are available online here.

With 10 tracks and 143 events, however, it can be hard for even dedicated entrepreneurs to know which panel discussion or startup success story to attend. So we’ve decided to highlight some of the Startup Week sessions that entrepreneurs would really want to attend. The events really cover the waterfront—downtown San Diego’s waterfront—and many, if not most of the best events are at night.

Our list is below. For a complete list of the week’s events, you can find the schedule here.

—Monday 6/17 at 4:30pm. A Fire Side Chat with San Diego’s Tech Coast Angels
1 Columbia Place, 401 West A Street

Angel investors from San Diego’s Tech Coast Angels discuss how entrepreneurs in the San Diego-Tijuana region can position themselves to win seed-stage and Series A funding. The speakers, who hail from different industries, also will talk about programs being developed to improve deal flow and the overall startup ecosystem.

—Tuesday 6/14 at 4 pm. Taco Tuesday with Taner
Downtown San Diego Partnership, 401 B Street, #100, 92101

San Diego angel investor Taner Halicioglu, a UC San Diego computer science graduate and one of the early employees at Facebook, has emerged in recent years as one of the region’s most active individual investors. Halicioglu worked with Mark Zuckerberg, Mark Andreessen, and Ben Horowitz, and is a co-founder and partner at Seed San Diego, an informal group of angel investors. Seed founders Allison Long Pettine, Eric Gasser, Kelly Abbott, and Doug Hecht also plan to attend.

—Tuesday 6/14 at 7 pm.  Keynote Talk by Upfront Ventures Partner Mark Suster
Copley Symphony Hall, 750 B Street, 92101

As a partner at Los Angeles-based Upfront Ventures, Mark Suster has acquired a reputation for smart, early-stage investments in software and Web-based startups. His interests include … Next Page »

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Biotech Roundup: ASCO, BIO, Drug Setbacks, Incubators & More

Fri, 06/10/2016 - 07:30

If you blinked, you probably missed something this week in biotech. The nation’s biggest annual cancer meeting took place in Chicago, while biotech’s trade group held its annual confab in San Francisco. In Boston, there were more twists for a closely watched Duchenne muscular dystrophy drug and a setback for a high-profile drug for multiple sclerosis. Plans for new incubators were announced in two different cities. We’ve got those stories, plus a spate of financings and deals, a legal feud, and other news below.

—At the American Society of Clinical Oncology’s annual meeting in Chicago, diagnostics maker Guardant Health of Redwood City, CA, discussed data culled from 15,000 cancer patients whose tumors have been analyzed by Guardant’s so-called liquid biopsy test. The results give the company confidence it can expand its tests to screen for early cancer in high-risk people who are otherwise healthy. Guardant is funding a series of trials around the country in people whose genetic or lifestyle profiles put them at high risk of five types of cancer.

—Meanwhile, check out reports here, here, and here for some of the other headlines coming out of ASCO, including progress made in cancer immunotherapy, the ups and downs from various presenting companies, and a visit from Vice President Joe Biden.

—At the annual BIO conference, which gathered in San Francisco for the first time since cops battled street protesters in 2004, industry bigwigs took to the stage to defend themselves. Not against street riots this time, but against political, financial, and social pressures that are changing the way America pays for drugs.

BIO president and CEO Jim Greenwood (pictured), a former Congressman-turned-lobbyist, told an audience, “We are fighting back,” and unveiled plans to put some of the blame for high drug prices on insurance companies. The industry has been mulling a counterattack for some time, as BIO chair and Acorda Therapeutics CEO Ron Cohen discussed publicly in January. As the conference wrapped up, a Morgan Stanley analyst noted that Pfizer the previous week had raised its drug prices nine percent, continuing a regular pattern of price increases. Ed Silverman at STAT reported the analyst note first. The new prices don’t reflect rebates and discounts.

—If Jim Greenwood railing like King Lear in the storm isn’t entertaining enough, two notorious biotech characters have once again inspired the imagination of creative types. Theranos CEO Elizabeth Holmes, just like her fellow black turtleneck wearer Steve Jobs, will get the big screen treatment. First reported by Deadline Hollywood, Hunger Games star Jennifer Lawrence has signed on to play Holmes. The director is Adam McKay, who turned collateralized debt obligations into riveting cinema in The Big Short. And in New York, these folks are writing a musical about Martin Shkreli—specifically, the hilarious rumor that Bill Murray might steal back the Wu-Tang Clan album Shkreli bought for $2 million.

—Xconomy profiled 27-year-old biotech CEO Alice Zhang, who represents what some might call the Silicon Valleyfication of the life sciences: Impatient with academia, she left her PhD program to start San Francisco-based Verge Genomics and hunt for new ways to target tough neurodegenerative diseases; she is as versed in informatics as she is in biology; and she is steeped in the business structures and tools that tech startups have used for years.

—More developments arrived this week in the Sarepta Therapeutics (NASDAQ: SRPT) saga. The FDA has asked for more data—specifically, data from 13 muscle biopsies from an ongoing Phase 3 trial—before it decides whether to approve Sarepta’s Duchenne muscular dystrophy drug, eteplirsen. Shares surged about 20 percent as investors took the news as a positive (here’s more about why from Cambridge, MA-based Sarepta immediately raised $37.5 million in a stock offering after the share boost.

—Cambridge-based Biogen (NASDAQ: BIIB) said that opicinumab, a drug meant to repair the nerve damage in patients with multiple sclerosis, failed a Phase 2 trial. Biogen hasn’t given up on opicinumab yet, but shares tumbled more than 12 percent nonetheless.

—Two more clinical setbacks decimated the shares of Massachusetts biotechs: Ocular Therapeutix’s (NASDAQ: OCUL) OTX-DP failed a trial for allergic conjunctivitis, while Catabasis Pharmaceuticals’ (NASDAQ: CATB) CAT-2054 flunked a study in patients with high cholesterol.

—On the positive side, Thousand Oaks, CA-based Amgen (NASDAQ: AMGN) released an overview of Phase 2 data that showed its migraine prevention drug, erenumab, is keeping pace with rival drugs in a heated race to market. The full data set has yet to be released.

—On to financings: Boston’s Ginkgo Bioworks raised $100 million to … Next Page »

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How to Make Healthcare Better? Make It Easy

Wed, 06/08/2016 - 09:59

There’s an “easy button” in the hospital that I press a hundred times every day. With each press, I make myself a better doctor. It’s not a button on a computer. It’s not electronic at all. It’s a hand sanitizer.

A decade or two ago, hospital handwashing compliance rates were in the single digits because washing with soap and water took too long. When Purell and other alcohol-based hand sanitizers became popular, hand cleaning went up and infection rates went down because it was so much easier for a provider who needs to enter patient rooms a hundred times each day to provide good care.

What’s remarkable about the popularization of hand sanitizers is that a simple technological innovation achieved better results than years of training, cajoling, and admonishment about handwashing ever did. Instead of forcing providers to slow down their workflow, hand sanitizers adapted to the existing workflow. Suddenly, well-meaning providers did not feel excessively burdened by the requirement to clean their hands before entering a patient’s room.

There are times when such a technological innovation is not an option. An example is the pre-procedure checklist, which has saved thousands of lives by requiring a procedure team to stop and ensure certain safety measures are completed before a surgery or procedure. Checklists inevitably take one or two minutes to complete. This time is well spent because rates of infection and other complications drop dramatically when checklists are used.

Implementation of a time-consuming safety innovation like a checklist requires a major cultural shift. Peter Pronovost, an anesthesiologist at Johns Hopkins who helped pioneer these checklists, has pointed to culture change as essential to successful implementation of a checklist. Physicians need to believe that checklists can improve their outcomes and other team members need to feel comfortable speaking up to make sure checklists are used. This culture change is far more difficult to achieve than the creation of the checklist itself.

As in the example of pre-procedure checklists, changing culture in healthcare can be both necessary and tremendously successful. Yet it is never easy. In terms of convenience, it can never compete with the instantaneous ease of hand sanitizer. So, whenever possible, we should seek technological solutions that make it easier to practice good medicine.

Opioids have received a great deal of regulatory attention recently because of the devastating burden of disease caused by these dangerous medications. Several states have recently passed laws intended to reduce the risk of opioid abuse. Unfortunately, some of the requirements, while important, will interfere with provider workflow significantly. This makes these regulations less likely to succeed.

For example, many states have passed laws requiring physicians to consult a prescription drug monitoring program (PDMP) website to see whether a patient is secretly receiving opioids from other providers. This is an excellent way to deter “doctor shopping” and reduce inappropriate opioid prescriptions. Yet it takes several minutes each time a physician needs to prescribe opioids to open a browser, log in (and remember the password), look up the patient, and review the prescription history. This inconvenience, small as it is, limits how consistent physicians are about complying with this rule.

A technological solution could greatly increase use of PDMP data. For example, if the data were imported automatically into the electronic medical record, it would greatly speed up the process. Rather than requiring a major cultural change to create a new expectation for physician behavior, this approach would make it easier for physicians to do what they already know is right. As with hand sanitizers, compliance rates would jump.

Whenever a regulator or hospital administrator identifies a healthcare quality problem, the natural reaction is to place extra requirements and responsibilities on providers. This is well-meaning, but fails to recognize that the education and culture change needed to implement new requirements is extraordinarily time-consuming. More focused investments of time in technology solutions to safety issues would save considerable time in the long term, and would lead to more successful interventions.

Healthcare does not need more burdensome rules dictating providers’ behavior. It needs more easy buttons.

Alex Harding is a resident physician in the primary care track of Internal Medicine at Massachusetts General Hospital. He has no financial interests to disclose. Follow @alexharding7

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San Diego’s KnuEdge, Stealthy Since 2005, Unveils Neural Tech

Tue, 06/07/2016 - 02:54

After operating in the shadows for the past 11 years, a San Diego neural technology company founded by former NASA administrator Dan Goldin is stepping into the light to introduce two commercial products intended to advance the frontier of human-machine interaction.

In a statement released yesterday, Goldin said the company founded in 2005 as Intellisis and now known as KnuEdge set out “to create technologies that will in essence alter how humans interact with machines, and enable next-generation computing capabilities.” The new technologies introduced for commercial markets are:

—KnuVerse, a voice-recognition technology that uses neuroscience techniques to filter other voices and environmental noise. KnuEdge says its software makes the security of human voice-based biometrics possible in noisy, real-world environments.

—LambdaFabric, computer processor technology based on neurobiological principles that is intended to accelerate neural computing technology. KnuEdge said its LambdaFabric technology is ideally suited for massively parallel processing applications, and can operate alone or be integrated with Intel processors and other processors. The technology is available for use in neural computing to support machine learning, Internet of Things (IoT), and signal processing.

KnuEdge said it already has generated $20 million in revenue and is “actively engaged” with elite hyperscale computing companies and Fortune 500 companies in the aerospace, banking, healthcare, hospitality, and insurance industries. The company now has about 100 employees at its San Diego headquarters, and in offices in Austin, TX, and Redwood City, CA.

The company operated for over 10 years as Intellisis, raised about $100 million from private investors, and maintained a low profile as a government contractor with special expertise in signal processing and machine learning. Key early figures include CTO Doug Palmer, a pioneer in the development of video-over-IP technology who also worked at San Diego’s Linkabit and HNC Software, and chief engineer David Eames, one of HNC’s original staff scientists and an expert in neural networks and parallel computing applications.

Kate Dilligan, a KnuEdge co-founder and executive vice president, said Goldin’s prominence at NASA made it easier for the small company to advance its technologies under government contracts. “We went to where some of the hardest problems were in both computation and in speaker authentication,” Dilligan said. The company worked under a contract with DARPA, the Pentagon’s Defense Advanced Research Projects Agency, and for other defense agencies, but Dilligan would not be more specific.

As Intellisis, the company sought to recruit specialists in neuroscience, software, and hardware technologies to develop innovations that support pattern recognition, speech processing, and high-throughput computing.

But the secretive company provided little information in early 2015 (when there were about 40 employees), trying instead to lure qualified applicants with several tantalizing “clues”—an image of a “Connectome,” (a wiring diagram of the neural connections of the brain), a brain, and a tesseract (or hypercube). My interpretation of the clues suggests the company is taking neuroscience-inspired technology to a new dimension.

[The Intellisis link is no longer active]

Goldin, who is now 75, declined to talk about the company at the time, writing in an e-mail, “We have not yet publically discussed our commercial product offerings.”

It also was rumored in San Diego technology circles in early 2015 that the company’s voice-recognition technology was used by the American intelligence community to identify “Jihadi John,” the British Arab seen in several videos released by the Islamic extremist group ISIS. The videos showed the beheadings of American journalist James Foley and other captives in 2014 and 2015. U.S. officials said last November that “Jihadi John,” who had been identified as Mohammed Emwazi, was killed in a drone strike. ISIS confirmed his death in its Dabiq magazine in January.

When I asked about the speculation, Dilligan declined to respond, saying, “Any application that the government used it for, we’re not able to discuss.”

Still, in its commercial debut as KnuEdge, the company says its “KnuVerse” product delivers “military-grade” voice-recognition and verification technology, claiming its system “unlocks the potential of voice interfaces to power next-generation computing.”

KnuEdge says its voice technology can authenticate a speaker, even in extremely noisy environments. The company says it could be used to recognize a user “with only a few words spoken into a microphone” in any language. It can be used in a variety of situations and across a host of devices, including computers, smartphones, and Internet of Things (IoT) sensors.

With the introduction of natural language software like Apple’s Siri, Microsoft’s Cortana, and Amazon’s Alexa, Dilligan said KnuVerse technology could open the way for a wave of new innovations in commercial voice technology.

KnuEdge also has begun marketing its technology in the banking, entertainment, and hospitality industries. “We’ve been talking with a lot of fintech companies, and millennials don’t like to use passwords, and they don’t like to carry around a lot of stuff,” Dilligan said.

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Biotech Roundup: Deals Gone Wrong, Ethical Red Flags & Bay Goodbyes

Fri, 06/03/2016 - 07:30

It was fitting this week that, in the lead-up to two of biomedicine’s biggest self-celebrations, we were served ample reminder of the industry’s expensive decisions gone wrong. This weekend, much of academia and industry involved in cancer will gather in Chicago for the annual American Society of Clinical Oncology conference. Thousands of others will head to San Francisco for BIO, which has a distinct international flavor.

But billions of dollars in acquisitions will be left by the side of the road. Leading the way was BioMarin Pharmaceutical’s decision to shelve its Duchenne muscular dystrophy drug drisapersen (Kydrisa), two years after paying $680 million for it. Merck also saw some expected fruits of its 2014 big-ticket acquisition of Cubist Pharmaceuticals wither away this week, as the Supreme Court wouldn’t reverse a decision that shaved years off the patent life of the top-selling antibiotic daptomyicin (Cubicin). Bad FDA news for Teva Pharmaceutical and AstraZeneca also threw outsized acquisitions into question.

Meanwhile, Sarepta Therapeutics saw its stock take a wild ride Thursday, a project to create a synthetic human genome took more flack, and the Bay Area biotech scene saw a couple old schoolers call it quits. To find out more, dive into this week’s roundup.

—A team led by Jef Boeke of New York University, George Church of Harvard University, Andrew Hessel of software maker Autodesk, and Nancy Kelley proposed in the journal Science to build a synthetic human genome. Last month, news of their closed-door meeting at Harvard stirred fierce debate, which continued this week. NIH director Francis Collins said in a statement that the type of project proposed raised “numerous ethical and philosophical red flags.” The project leaders are seeking $100 million in funding.

—Considering the biopharma acquisitions that led to buyers’ remorse this week, $100 million seems like pocket change. BioMarin Pharmaceutical (NASDAQ: BMRN) of San Rafael, CA, said it would not try to gain European approval of drisapersen, four months after U.S. regulators rejected the Duchenne muscular dystrophy drug. The decision shelves a program that BioMarin bought two years ago for $680 million.

—When Merck (NYSE: MRK) bought Cubist Pharmaceuticals for $9.5 billion in December 2014, it counted on blockbuster sales of Cubist’s skin-infection antibiotic daptomycin (Cubicin) for years. But the U.S. Supreme Court this week refused to reinstate four disputed patents related to daptomycin, according to Reuters. The only remaining daptomycin patent will expire in June, clearing the way for generic competition years earlier than expected.

—The FDA also made regulatory decisions that cast a pall on recent buyouts. Last Friday, it rejected AstraZeneca’s ZS-9, meant to lower dangerous blood potassium levels in patients with heart or kidney disease. AstraZeneca got the drug when it bought ZS Pharma in late 2015 for $2.7 billion. Shares of competitor Relypsa (NASDAQ: RLYP) are up more than 25 percent since the ZS-9 decision.

—This week the FDA said no to deutetrabenazine, a drug to treat symptoms of Huntington’s disease owned by Teva Pharmaceutical Industries. The agency wants more data about the drug, but not necessarily more clinical testing. Teva nabbed deutetrabenazine in its $3.2 billion acquisition of San Diego’s Auspex Pharmaceuticals last year.

—And the FDA giveth… After more than a decade of twists and turns, Cranbury, NJ-based Amicus Therapeutics (NASDAQ: FOLD) tallied its first drug approval, as the European Medicines Agency cleared migalastat (Galafold), a treatment for Fabry disease. A company official told Xconomy the drug would be priced in line with standard of care enzyme replacement therapy, which costs around $300,000 per patient, per year. The FDA also approved obeticholic acid (Ocaliva), a drug from New York-based Intercept Pharmaceuticals (NASDAQ: ICPT) for the rare liver disease primary biliary cirrhosis. The drug has a list price of $69,350 per patient, per year.

—Jazz Pharmaceuticals (NASDAQ: JAZZ) agreed to pay $1.5 billion for Ewing, NJ, and Vancouver-based Celator Pharmaceuticals (NASDAQ: CPXX) and its leukemia drug CPX-351, a reformulation of the oft used chemotherapy combination of cytarabine and daunorubicin. Celator planned to file for regulatory approval in the U.S. and Europe later this year.

—A Bay Area biotech warhorse is cashing it in. StemCells of Newark, CA, said this week it would wind down operations after a Phase 2 trial of its lead product, a spinal cord injury therapy, didn’t do enough to help patients.

—Another Bay Area old timer is stepping aside. Richmond, CA-based Sangamo Biosciences (NASDAQ: SGMO), the only gene editing firm to advance a treatment into clinical trials, said its founder president and CEO Edward Lanphier would hand over the reins but keep his board seat. Sandy Macrae, most recently the chief medical officer of Takeda Pharmaceutical, is now CEO and president.

—More cash for life sciences venture teams: 5am Ventures of Menlo Park, CA, announced its fifth fund, topping it off at $285 million. And Boston and London-based venture firm SV Life Sciences has raised $274 million towards its sixth fund, according to a regulatory filing.

—Edison, NJ-based Contravir Pharmaceuticals (NASDAQ: CTVR) acquired privately held Ciclofilin Pharmaceuticals of San Diego to add another experimental drug for hepatitis B to its portfolio. Contravir will pay $17 million in cash and 10 percent of its equity to Ciclofilin shareholders, but only if the company’s lead drug, CPI-431-32, hits certain milestones.

—The nonprofit Boston-based T1D Exchange and med tech startup incubator M2D2 have launched what’s being called the “Diabetes Innovation Challenge,” a competition to help find and fund new ideas—devices, drugs, and diagnostics—for diabetes research. Two winners will be chosen in October and get up to $150,000 in cash and other prizes.

—Let’s finish with funding: San Mateo, CA-based Vium—formerly known as Mousera—raised $33 million to build its high-tech vivarium business…Ann Arbor, MI-based Strata Oncology reeled in $12 million to build out its tumor sequencing and clinical-trial referral service….Boston startup Antera got $1.7 million in seed funding from RA Capital Management and others to help sell a liquid formula for infants to help prevent the onset of peanut allergies.

Xconomy Deputy Biotech Editor Ben Fidler contributed to this week’s roundup.

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7 Steps Online Companies Can Take to Manage Sales Tax Exposure

Fri, 06/03/2016 - 04:01

States have been fighting to collect sales taxes from online retailers since the dawn of the e-commerce age. But today, online companies that sell services rather than merchandise also need to be concerned about state sales taxes. Even though most services are usually not subject to sales tax, some states are now asserting that certain online services are taxable either as software, data processing, or information services, even if the type of service would not be taxable if delivered the old fashioned way – by people – rather than computing platforms.

Online service companies need to be aware of these potential tax traps so they are not surprised when a state tax agency comes knocking on their door. There are numerous steps that smart companies can take to avoid unpleasant surprises.

For example, medical services are generally not subject to sales tax. However, the New York Department of Taxation recently said that an online healthcare service company must collect sales tax from its customers. The company receives biometric readings from patients, like blood pressure or glucose levels, and these readings are transmitted to the company via its Web platform. If the algorithm detects a problem with the results, it sends a text message to the patient’s caregiver. New York said that the company is providing taxable cloud computing services. If the same service was provided by a traveling nurse, it would not be subject to New York sales tax.

A 2013 New Jersey tax notice says that several types of services that are delivered using a computing platform are subject to tax as an information service. The taxable services include businesses that generate sales leads for automobile dealers, where prospective purchasers input the type of vehicle they are interested in buying and their location, and the service matches them to inventory in the auto dealer’s lot. If the auto dealer paid for traditional advertising in a newspaper it would not be taxable, but using a Web platform to make the same match between an auto dealer and an auto purchaser transforms this into a taxable service in the eyes of the New Jersey Division of Taxation.

The Texas Comptroller’s Office took the position that a company that provides a Web-based bill paying service platform to banks – so that the banks can allow its customers to pay their bills online – was a taxable data processing service. The company had to fight this in the courts, and was ultimately successful, but this cost the company a great deal in legal fees. More troubling to other online service companies is that the judge’s rationale for ruling in favor of the online bill payment company was that it utilized over three thousand employees to provide this service, demonstrating that it was a nontaxable professional service rather than a taxable data processing service. Companies that provide services that do not employ large numbers of workers might face a less favorable result.

There are seven steps that a company can take to manage these state tax risks:

1. An analysis should be performed to determine whether its service might be classified as (a) software as a service, (b) platform as a service, (c) a data processing service, or (d) an information service. This analysis will require discussions between the technology team and the company’s tax advisors, reviewing each step of the service delivery process.

2. An initial survey should be performed to determine which states might take the position that the service fits into one of these taxable services. This state by state review should be prioritized based on which states generate the highest sales. It might not make sense to spend money to review the rules of a state that says the service might be taxable if the company has only minimal sales there.

3. Once the potentially problematic states are identified, a “nexus” study should be performed to determine whether the company has the adequate presence in the state to require it to collect the state’s tax. A 1992 Supreme Court case said that a company needs to have a physical presence or “nexus” in the state before it can require the company to collect tax. So if the company does not have nexus, it is not required to collect sales tax from its customers. Nexus can be triggered by having workers in the state – even if they are working from home or just visit customers in the state. In many states, nexus can be triggered if the company pays commissions to a referral source there through a click-through arrangement. Nexus can also be triggered just by attending trade shows in a state. These rules vary from state to state, so the tax advisors need to review each state separately.

4. Once it is determined that there is sales tax exposure in a particular state, it may be possible to tweak the contract with the customer to limit exposure. This can be done by providing language classifying that the intent of the contract is to provide services, not cloud services, data processing, or information services. In addition, the contract should make clear that if the service is subject to sales tax, the customer agrees to pay the tax, even if the tax bill does not come until after the company is audited.

5. Policies should be adopted to ensure that the company will not inadvertently trigger nexus with any problematic states – such as prohibiting sales representatives from traveling there on business.

6. Invoices to customers in the problematic states can be structured to separately itemize the various components of the service, so that sales tax would be applied only to the potentially taxable portion of the services.

7. The company should consider filing a voluntary disclosure with problematic states in order to limit its tax exposure for prior sales.

It is a brave new world for online service providers who sell services that heretofore were not subject to sales tax. These companies should proactively determine whether they have any potential tax exposure. Companies that simply bury their heads in the sand might get buried by large state tax obligations.

This article is presented for informational purposes only and is not intended to be construed or used as general legal advice, nor as a solicitation of any type.

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Drone On: 3D Robotics Filing Reveals $45M Financing Plan

Fri, 06/03/2016 - 03:10

After a painful restructuring earlier this year, Berkeley, CA-based 3D Robotics appears to be raising additional capital.

The high-profile drone startup, which raised $50 million in venture funding early last year in a Series C funding round led by San Diego-based Qualcomm (NASDAQ: QCOM), has raised almost $26.7 million in a combination of securities, convertible debt, and debt, according to a regulatory filing Wednesday.

The company could raise up to $45 million through the financing, which began May 21st, according to the filing.

No details about the latest financing could be found on the company’s website. CEO Chris Anderson, the author and former Wired magazine editor who co-founded 3D Robotics in 2009, did not respond to an e-mail query about the financing yesterday afternoon.

If the financing represents a fresh infusion of capital, it would bring total funding for 3D Robotics to roughly $150 million over the past seven years.

The company’s existing investors include Atlantic Bridge Ventures, Foundry Group, Mayfield, O’Reilly AlphaTech Ventures, Qualcomm Ventures, SanDisk, SK Ventures, True Ventures, WestSummit Capital Management, and Richard Branson.

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A Startup CEO Visits Cuba in Transition

Thu, 06/02/2016 - 15:37

I just returned from several days visiting Cuba with several of my BFFs. No amount of pre-reading prepared me for the wonderful experience. Americans cannot go as “tourists,” but must go on an approved people-to-people exchange. As such, we visited schools, farms, a university, children’s programs, museums, churches, a factory and the like.

I’m sharing ten observations on everything from Communism to infrastructure to happiness.

As a startup CEO, I also went wondering whether and when Spare5 might engage Cuba and Cubans—as suppliers of the human insights we source, and customers who need high-quality data to train artificial intelligence engines.

The short answer: not any time in the foreseeable future. Many Cubans have an entrepreneurial, optimistic spirit that bodes well for the long-term. But for now, Cuba is isolated, antiquated and underdeveloped.

The author, center, in yellow, and fellow travelers at a Cuban school. Photo courtesy of Matt Bencke

Once both the U.S. and Cuban governments open up the technology, banking and regulatory structures, and Cubans have unfettered access to the Internet, that will change quickly. At that point, I imagine that Spare5, and many other high-technology companies, will find a rich, untapped market of educated consumers and suppliers who are eager to join the Western world.

1. Communism. Cuba is Communist the way Marx, Lenin and Guevara would have liked it. Unlike China, which claims Communism but embraces capitalism, Cuba is covered with propaganda espousing equality, continuous revolution and anti-imperialism. People have universal home ownership, literacy and healthcare. People don’t seem to own very much. The state controls roughly three quarters of the economy, and there’s almost no unemployment (perhaps 3 percent).

Photo courtesy of Matt Bencke

2. Embargo. That’s just as well, because there doesn’t seem to be much to buy. There’s very little private enterprise (paladars, e.g., are private restaurants). The U.S. embargo means quite a bit more than the U.S. does not trade with Cuba. The U.S. also penalizes other businesses and countries that trade or conduct financial transactions with Cuba. The net is that Cuba has massive shortages of items we take for granted. I brought baseball caps and chocolates; next time I would bring pens, guitar strings, and school supplies. For visitors, there are no banks or ATMs. Cash and carry.

3. Crime. But that’s mitigated by the fact that the country is very safe. Women left their purses out on tables when they excused themselves. Our tour guide said he’d never heard of a pickpocketing.

4. Infrastructure. Hotels are comfortable, and there are more paladars popping up. But Havana is crumbling everywhere you look, and there just isn’t enough capacity to host the possible tourist floods.

5. Poverty. We met with a Health Ministry official, who was proud that the average life expectancy is 78 years in Cuba, that there is approximately one local doctor for every 1,000 Cubans, and that there is almost no type 2 diabetes. But he bemoaned that they managed to import a $1.5-million MRI, only for it to arrive with a broken part that they … Next Page »

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